Find the solutions you need by accessing our extensive portfolio of information, analytics, and expertise. The IHS team of subject matter experts, analysts, and consultants offer the actionable intelligence you need to make informed decisions.

Ugandan Government Reinstates LAP Green Networks' Stake in UTL

The Ugandan government has reportedly reinstated the 69% stake owned by LAP Green Networks in fixed-line incumbent Uganda Telecom Ltd.

At the start of 2011, LAP Green Networks owned stakes in nine operators across sub-Saharan Africa, but the operator has been adversely affected by the imposition of UN sanctions against certain Libyan assets in February 2011.

LAP Green Networks acquired a 69% stake in Uganda Telecom Ltd (UTL) in 2007, but in March 2011 the government retook control of UTL in part due to the imposition of sanctions, and in part to resolve UTL's outstanding debts to other operators.

In addition to UTL, Rwandatel was liquidated in October 2011, the Zambian government seized its majority stake in Zamtel in January 2012, and the Nigerien government voted to nationalise Sonitel in May 2012.

LAP Green Networks is currently taking legal action against the Zambian government for its seizure of the operator's stake in Zamtel "to safeguard its legally acquired assets".

Over a year after the Ugandan government retook control of UTL, Reuters reports that it has now returned the majority stake to UCOM, a subsidiary of Libya Africa Portfolio (LAP) Green Networks. LAP Green Networks in turn is a subsidiary of Libya African Investment Portfolio (LAIP), an investment arm of the Libyan government. According to a statement issued by LAP Green Networks and reported by Reuters, "shareholders and directors of its wholly owned subsidiary UCOM ... have now resumed their management control responsibilities of Uganda Telecom Limited (UTL)".

LAP Green Networks acquired a 69% stake in UTL five years ago in 2007; the government is the minority shareholder (see Uganda: 13 April 2007: LAP Takes Control of UTL). However, in March 2011 Uganda's Minister of Communications Aggry Awori announced that the government was taking control of UTL (see Uganda: 30 March 2011: Ugandan Government Takes Control of UTL). Dow Jones reported that an oversight committee has been appointed by the government, supervised by the regulator, to oversee the daily operations of the company.

This move by the government came in relation to a freeze on certain Libyan assets, but in particular to resolve the issue of outstanding interconnect debts reportedly owed by UTL to both MTN Uganda and Airtel Uganda (see Uganda: 15 March 2011: MTN Uganda Agrees Not to Disconnect UTL over Interconnection Dispute). Dow Jones reports that UTL faced an outstanding bill of 20 billion Ugandan shillings (USD8.2 million) to MTN Uganda and UGX8 billion to Airtel Uganda. Reuters reported the Minister as saying that the government's move to take control of the operator was partly to deter other companies from seizing the firm's property.

Following events in Libya last year, the operator's assets were frozen in a number of countries, with the governments notably taking over the management of privatised fixed-line incumbents in Rwanda, Uganda and Zambia. LAP Green Networks reportedly said last year that the UN sanctions imposed in February 2011 targeting the then Libyan leader Colonel Muammar al-Qadhafi "have made it virtually impossible for it to carry out bank transactions", according to Reuters.

The Ugandan government took control of UTL in March 2011, Rwandatel was liquidated in October 2011, the Zambian government seized its stake in Zamtel in January 2012, and the Nigerien government voted to nationalise Sonitel in May 2012:

Côte d'Ivoire: In Côte d'Ivoire the operator holds 80% of mobile operator Oricel Green, branded as GreenN Côte d'Ivoire, which launched services in December 2008 and reached 1.06 million subscribers by December 2009.

Niger: In Niger the operator acquired a stake in fixed-line incumbent Sonitel and its mobile subsidiary Sahel Com. However, in June 2011 the Nigerien Minister of Communications announced that the government was cancelling the sale of a 51% stake in fixed-line incumbent Sonitel and SahelCom to LAP Green Networks (see Niger: 15 June 2011: Nigerien Government Revokes Sale of Sonitel to LAP Green Networks). On 2 May 2012, parliament voted to nationalise the operator (see Niger: 3 May 2012: Nigerien Parliament Votes to Nationalise Sonitel).

Rwanda: LAP Green Networks acquired an 80% stake in RwandaTel in October 2007 (see Rwanda: 15 October 2007: LAP Green Com Wins 80% Stake in RwandaTel). However, Rwandatel was liquidated in October 2011 in order to raise enough funds to repay its creditors following a ruling by the commercial court (see Rwanda: 12 October 2011: RwandaTel to Be Liquidated Next Week).

Zambia: In June 2010, LAP Green Networks acquired a 75% stake in fixed-line incumbent Zamtel (see Zambia: 7 June 2010: LAP Green Networks Wins Zamtel Privatisation). However, on 24 January 2012, President Michael Sata issued a statement saying that the government would "compulsorily acquire the 75% shareholding of LAP Green Network" following an investigation last year into ZAMTEL's privatisation, which was concluded by the previous government. LAP Green Networks has started legal action to recover its stake (see Zambia: 20 March 2012: LAP Green Networks Sues Zambian Government over ZAMTEL).